Tesco will seek this week to calm investors' fears that its much trumpeted American venture, Fresh & Easy, has run into trouble.

The supermarket chain, which is expected to report annual profits of £2.8bn tomorrow, launched the chain of convenience stores in California five months ago with an ambitious programme. But at the end of last month it put the expansion plans on hold, ringing alarm bells among analysts and investors.

At the presentation, Tesco will not give a breakdown of sales for the fledgling business but it does intend to present customer research and feedback, which it hopes will prove that plans for the business are still on track.

Britain's biggest supermarket chain has so far opened 60 Fresh & Easy stores. The company announced plans at the end of last month to take a three-month break from further openings, saying it wanted to give the business time to "settle down". Tim Mason, the Fresh & Easy chief executive, has said "every single week brings more good news".

Some analysts have been sceptical of the venture. Goldman Sachs downgraded the supermarket chain last month. In an eviscerating research note at the same time, Mike Dennis of the US broker Piper Jaffray said research among US suppliers suggested that first-half sales at Fresh & Easy may be as little as $30m (£15m), compared with forecasts of $100m. The analyst blamed "very weak footfall". Tesco said the claims were untrue. A spokeswoman said the company was "bewildered" by the analysis and said Tesco was very pleased with the progress of the chain.

Tesco plans to build a network of a thousand stores stretching across California, Arizona, Nevada and north to Washington state. The outlets have only basic fittings and focus on fresh food and ready meals at low prices.

Tesco's profits are expected to be about £250m higher than in the previous year, an 11% increase. Total sales are likely to be about £47bn, a 10% gain. Tesco sales are about the same as Sainsbury's and Asda combined. About half the increase in profits is expected to have come from Tesco's expanding overseas operations. The company has pushed into countries including Poland and Thailand as well as the United States.

The performance of the overseas operations is crucial to Tesco, which appears to have been losing out to rivals in its domestic market. Last month the market research group TNS released figures showing Tesco underperforming against the wider grocery market, its share slipping from 31.3% to 30.9% over the past year. Among the beneficiaries have been Morrisons and Asda.

Tesco shares have been under pressure, falling 18% since the beginning of the year.

Analysts will scrutinise chief executive Sir Terry Leahy's comments at the presentation for any hints of the extent of the downturn in the economy. With Tesco taking £1 in every £3 spent on grocery shopping in Britain, the retailer has become a barometer of consumer confidence.

Tesco has been expanding into non-food areas including clothing and electrical goods. The retailer plans a further 10 of its non-food Homeplus stores in Britain.

Like-for-like sales in the first half of the year at Tesco's 1,482 UK stores were 3.5% higher. It reported half-year profits up a better than expected 14% to £1.32bn. Overseas stores made a trading profit up 19% at £271m from sales 23% higher.

Food for thought

Tesco will this month become the latest company to launch its own degree programme. The supermarket chain is initially offering the retail management degree to its staff but plans to make the course available for other retailers to adapt. Tesco hopes the course will become the standard qualification for supermarket bosses. The course will be taught online and instore, and include some days at university. It has been designed with Manchester Metropolitan University and the University of the Arts London. It follows an announcement by the government in January allowing businesses to award qualifications equal to GCSEs, A-Levels and degrees. McDonald's was among the first, offering a management course equivalent to an A-level.